Contract analysis

I. INTRODUCTION AND BASIS FOR FILING The Court's March 17, 2023 Order requires the Parties to file a joint status report every one hundred twenty (120) days advising the Court of the current status of the DCMA administrative review and whether, in the judgment of the Parties, the stay of proceedings should remain in effect. The Order further directs the Parties to include in each status report any developments in the

II. BACKGROUND The Parties provide the following brief recitation of the procedural history of this action for the convenience of the Court. On November 28, 2022, WAL commenced this action by filing a Verified Complaint for Declaratory Judgment (ECF No. 1). In its Complaint, WAL seeks a judicial declaration that Section 11.4 of the Teaming Agreement dated June 12, 2019, between WAL and HDDS (the "Teaming Agreement")

III. STATUS OF THE DCMA ADMINISTRATIVE REVIEW The Parties jointly report to the Court that the DCMA administrative review of cost overruns under Prime Contract No. FA8620-19-C-0337 remains pending and has not yet concluded. The Parties provide the following specific information regarding the current status of the administrative proceedings:

1. The COPD. The Contracting Officer's Preliminary Determination issued by Administrative Contracting Officer Lt. Col. Sandra M. Vickers, USAF, on August 1, 2022, identified aggregate cost overruns of $14,726,583 on the ATAP program. The COPD attributed approximately $12,817,441 of those cost overruns — representing approximately 87.03% of the total — to Work Package 4, which encompasses the titanium structural assem

2. HDDS's Response and Request for Final Decision. On October 15, 2022, HDDS filed a formal response to the COPD and a request for issuance of a Contracting Officer's Final Decision ("COFD") under the Contract Disputes Act of 1978, 41 U.S.C. §§ 7101–7109. In its response, HDDS disputed certain aspects of the cost-overrun allocation set forth in the COPD and requested that the Contracting Officer issue a final determi

3. No COFD Has Been Issued. As of the date of this filing, ACO Lt. Col. Vickers has not issued a Contracting Officer's Final Decision. The Parties are not aware of any interim deadline or schedule established by the DCMA for the issuance of the COFD.

4. Ongoing Field Audit. The Parties understand, based on correspondence from the DCMA, that the field audit of costs incurred under the prime contract is ongoing. The DCMA field audit is being conducted by the Defense Contract Audit Agency ("DCAA") in coordination with the DCMA contracting office. Neither WAL nor HDDS has received information from the DCMA or DCAA indicating a specific timeline for completion of the

5. No Interim Determinations. No interim determinations, partial decisions, supplemental findings, or other administrative rulings of any kind have been issued by the DCMA, the DCAA, or any other administrative body since the issuance of the COPD on August 1, 2022.

6. Party Communications with the Government. Both Parties have had routine communications with the DCMA contracting office in connection with ongoing contract performance obligations under Prime Contract No. FA8620-19-C-0337. However, neither Party has received any substantive communication from the Government indicating a change in the scope, methodology, or anticipated timeline of the administrative review process

IV. PARTIES' JOINT RECOMMENDATION REGARDING THE STAY The Parties jointly represent to the Court that the basis for the stay of proceedings, as articulated in the Court's March 17, 2023 Order, remains fully in effect. The DCMA administrative review is continuing, and the Contracting Officer's Final Decision — which is expected to resolve or substantially narrow the factual predicate for the Parties' indemnification di

V. RESERVATION OF RIGHTS Both Parties expressly reserve all rights, claims, defenses, and arguments in this action. Nothing contained in this Joint Status Report, including any factual recitation or characterization of the DCMA administrative proceedings, shall be construed as a waiver, admission, or concession by either Party with respect to any position on the merits of this litigation, any procedural rights, or an

VI. CONCLUSION For the foregoing reasons, the Parties respectfully request that the Court accept this First Joint Status Report and maintain the stay of proceedings in this action pending the conclusion of the DCMA administrative review under Prime Contract No. FA8620-19-C-0337. The Parties further request that the Court continue to require joint status reports at 120-day intervals, with the next report due on or bef